About this Show

Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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DURATION
01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
528

PIXEL HEIGHT
480

TOPIC FREQUENCY

Washington 13, Us 12, John Boehner 8, Blackberry 6, Boehner 5, U.s. 5, Ho 4, Harry Reid 3, Paul Brown 3, S&p 3, Hawaii 3, Rick Santelli 3, Oates 2, Ben Bernanke 2, Pelosi 2, Barclays 2, Geico 2, Bernanke 2, Steve Sax 2, Steve Liesman 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    December 13, 2012
    3:00 - 4:00pm EST  

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arrested for biting the eyebrow of his neighbor scott hall. get it. hall and oates. we kind of fooled you with, still kind of funny minus the biting of the eyebrow. no one was harmed. >> hall was harmed, eyebrow bitten by oates. i shouldn't laugh. >> thanks for watching "street signs," everybody. "closing bell" is next. see you guys tomorrow same time. hi, everybody. good afternoon. welcome "closing bell." i'm maria bartiromo at the new york stock exchange. it's a case of what the fed and fiscal cliff follies for the stock market today, bill. >> sure is. welcome back. i'll bill griffith. stocks losing streams after house speaker john boehner and senate majority leader harry reid stoked the notion that a deal is not close.
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down as many as 94 points on the dow at the low of the session and now down at 82 at 13,163. the nasdaq down 26 points right now, a decline of almost a percent at 2987 and the s&p 5 hundred index, trying, doesn't look like it will, seven straight up days, not today though, down ten points at 1418. >> investors dealing with jewel issues. not only is the fiscal cliff situation looking dicier by the day as we head headlines out of announcement by the federal reserve's announcement tying rate hikes to the unemployment rate. >> our next guests are here with their best ideas going into the new year. today's "closing bell" exchange, gary webbush here with us and steve sax from pro shares advisors and steven gil garcetg
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and our own jeff cox. no encouraging words out of washington, here we go again, from either the fed or congress. >> right, and frankly that's very expected. there's going to be a -- some grandstanding about your political philosophies right up until the end, but the way i view this is we will not and cannot go over the fiscal cliff. >> you think the can will be kicked down the road. >> well, i think washington learned its lessons from the credit crisis. they are not going to have this go over the cliff, and i think it's going to be a recipe of a small part of cutting spending. a small part of raising taxes and a healthy doze of kicking the gan down the road. >> you would be so sure that these guys cannot do it when in fact here we are 18 days away. steve sax from your standpoint in, terms of etfs and in terms of indexing out there, how do you want to invest given all of
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these uncertainties as we approach year end? >> i'm in the camp i certainly hope we can avoid the fiscal cliff, but right now i don't have a lot of confidence. we're still seeing a lot of flows in several different areas. certainly domestic equities and emerging markets have been key areas. we're still seeing that risk appetite strangely enough, even with all the uncertainty out there. that being said, we're seeing a lot of people and having a lot of conversations about hedging exposure, particularly in domestic equities and also seeing a lot of conversations. getting a lot of conversations about expected inflation in 2013 and beyond, you know, as we approach the fiscal cliff and obviously as we continue to digest the fed news from yesterday >> what does that mean? how do you invest then? where are you seeing the real flows? >> well, i think a couple of things. i think ultimately, you know, u.s. domestic equities are still a place to be, still a risk-on appetite. although, like i said, there is probably a little more appetite for risk management or hedging of the flows so we're seeing
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interest in a lot of different areas. hedge fund replication, long/short equity strategies. a particular fund recently launched, mrgr, the pro shares merger fund, strategies like that, alternative strategies that provide you equity upside with long short protection on the downside as well. >> we were talking earlier, another down day following a fed meeting like we got in september, with you this time they are not exactly rushing to the safe havens either, are they? >> no, no. gold is o.you're seeing all of the sectors are off, reits, health care, you name it. >> what is that saying? >> in for some volatility. the vix isn't playing along but it always doesn't. i think we ought to keep the political speakers out of the game. >> are they grandstanding? >> that's exactly right. we don't have to pay attention to them. that's something we do as traders, and we know that they are going to play politics and both try to play hero and wait
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each other out. >> let's talk about the other issue, and jeff cox, coming to you shortly. gary, your take on yesterday's federal reserve meeting, this idea that we are targeting everything to the unemployment rate, and by the way, 6.5%? i mean, where does that number come from? >> yeah. that i don't know where that number comes from, but i do know it's a significant improvement from where we're at. >> exactly. >> that's an historic move, tying fed policy to a very specific number and making it public. i think today you're seeing the markets digest that. they are not quite sure what to do with that, it's unprecedented. >> does it dictate how you allocate capital? >> i think it's going to dictate how traders trade their portfolios as they watch the inemployed rate. it's going to make that unemployment rate number announcement, you know, every time it comes out a huge announcement. >> even though fed chairman bernanke was very careful to say it's only a guidepost and that doesn't mean it's a trigger to raising rates. >> once you say it, you come out
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with a specific number? >> they waved the red flag there. >> yeah. so you're going to see, you know, confidence in bonds until maybe 7.5%, 7.25%, when you start nearing that but exteamly bullish for the stock market. where's the money going to go? >> what do you think, jeff cox? >> the fed told you everything they want to know as far as their thinking towards the fiscal cliff negotiations. they have said, threw down the gauntlet, we're going to be here. the global u.s., the economy is of the fed, by the fed, for the fed. we have now $65 trillion worth of global assets tied up at zero interest economies. what's that doing for economies? they are looking for yield, junk bond issuance at its highest level ever by allotted, so you're seeing -- that's where this trade is going to keep going. investors setting themselves up for a lot of trouble. the third thing is now basically investors are at sea.
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what do you do? i'll tell you a very telling story. bank of america 2013 outlook. they are super bullish and hung a 1600 on the s&p next year and said the biggest downside risk improvement in the u.s. economy because that might get the fed to scale back. that's how you show how dependant we are and what little confidence they have of what's going on in washington. >> does that mean if we get a deal any time soon out of washington that the market rallies and the volatility ends, or what are you expecting? >> i think the volatility will end somewhat at that point. as the other guests have said, i think there is tremendous pent-up risk-on momentum here, and i think it will carry on into the new year. the investments will be worth more dollars. your dollars just might be worth a lot less. >> steve sax, are you seeing any change to the dividend strategy to sort of, you know, tying investment ideas to the tax story like capital gains and
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what about the dividend strategy? >> we haven't seen that yet, maria, but we will. once we get past the first of the year you'll see a little bit of that buying pressure get relieved. we just talked about it. still a yield for reits so if you're getting yield out of equity-based investments, that's a theme that continues in 2013 given the interest rate environment. it probably won't be to the same degree that we've seen over the last six to eight weeks. >> here's what scares me about the whole yield story is you have companies that have like b-minus cred wit 5.25% coupons, 5.5% coupons, that's crazy. that's absolutely nuts for companies that would normally be carrying somewhere in the 7.5% range or down that far. i think this push towards yield has trouble written all over it. >> bonds are far riskier than equities right now. >> sure. >> gentlemen, thank you all for your thoughts today. see you later. heading towards the close.
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50 minutes left in the trading session and the dow down. >> ben bernanke's latest move to stimulate the economy, is it actually hurting things? steve liesman and rick santelli tackle it out next. >> oh, boy. and we'll hear from a top republican lawmaker warning that the real fiscal cliff is a couple years away when the economy could collapse because of runaway spending. congressman paul brown will join us. >> and top picks for 2013. you'll never guess what stock he likes the most. >> hmm. >> back in a moment with that. [ male announcer ] with wells fargo advisors envision planning process, it's easy to follow the progress you're making toward all your financial goals. a quick glance, and you can see if you're on track. when the conversation turns to knowing where you stand, turn to us. wells fargo advisors. [ male announcer ] you build a reputation by not breaking down. consider the silverado 1500 --
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welcome back. take a look at these markets. we're worsening as we approach the close. the dow jones industrial average down 92 points. that's almost, well, two-thirds of 1% at 13,153. nasdaq worse off than when we started the show, down 27 points, and the s&p 500 down 11 with 45 minutes before the close today. bill? >> and commodities are also lower. what's pressuring them? hey, let's ask sharon epperson. she's at the nymex with some answers. >> do i have some answers for you, bill, and traders telling
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me all day how the fed was such a disappointment and the fact that the fiscal cliff keeps lingering on. we'll have stimulus and lower rates and that's all tied to the condition of the unemployment rate and that changes the whole script for many traders. oil prices at their lowest levels in a week and looking at selloff of metals across the board and gold prices down more than 20 bucks. gold is where you can see what the fed action means to the market and the fiscal cliff as well, but add to that the fact that a lot of traders want to take profits going into the end of the year. seen gold gain 8%, even with the selloff we're experiencing right now and even with gold prices below $1,700 right now. some traders say 2013 could be a different story for gold, still a lot of demand for physical gold as well as exchange-traded funds so that is one thing that may be a bright spot for gold going forward. back to you. >> thank you so much, sharon
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epperson. by the middle of 2014 that is when we may see the federal reserve make a move to raise interest rates. why? because the cnbc data team figures if unemployment keeps falling at its current rate, that's when we can expect it to hit the fed's newly announced target. >> what does this new tactic mean for the economy is let's bring it down with our fed expert and they rarely agree. senior economics reporter steve liesman and our own rick santelli. make guys, guys. steve, where do we stand on this with the new target, the new way of looking at monetary policy? >> you know, bill, i wish i knew more. i think it's really unclear at this moment. what the federal reserve is saying is instead of saying the funds will remain low through mid-2015, it's saying it's going to keep rates low as long as unemployment is at least 6.5%, right? so it's not more than. it's at least 6.5%, and
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inflation remains subdued. at 6.5% the federal reserve could still keep the funds rate low, and it could -- as long as inflation is subdued. >> okay. >> i'll just tell you there's a lot of questions, bill, about what that metes means en route to 6.5. >> 6.5%, do you think it's possible that we could be at 6.5% in one year? >> a lot depends on how we get there, and the fed chairman was asked about this yesterday. clearly he looks at the internals to the unemployment rate. if we get there through a decline in the participation rate instead of, for example, people being hired, then i think that's going to be a different kind of thing than if we get there through a lot of employment. >> rick, i know you're not a fan of monetary policy, but we are getting job growth, anemic job growth. would it be better if we didn't have all the intervention right now or what do you think? >> oh, i definitely think so and i'll tell you what. not to argue with our cnbc staff but the problem saying at current levels or current job
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creation it will take until 2014. the big elephant in the room is the labor force participation rate. let me give you an example. if it stays at its close to three-decade low which it was on the last report you need about 150,000 jobs just to remain at current unemployment rate but if things get better and optimism starts to come in at some point, let's say the labor force participation rate goes up two points to 65.6, now all of a sudden you need 450,000 jobs just to keep the same rate at that labor force participation rate. so i guess one of the interesting things is every first friday of the month it isn't only me who is going to be looking at what unemployment got beamed to mars. ben bernanke is now going to be right there with me because he won't want to remove accommodation if people are disappearing versus actually getting jobs, so in a perverse way i welcome him to be a partner in really calling job creation real or memorex.
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>> i think it's interesting, steve, that the whole targeting process has started because we know that the federal reserve has already told us umpteen times that rates will probably stay at very low levels until the end or middle of 2015. so, you know, right? so now we're talking about 2014 just because we're only -- we're doing the calculations ourselves. >> right. well, that's really what the process is, maria. what the data team did today is what every investor needs to be doing. we've replaced a date certain with a forecast for unemployment which is, as rick pointed out, got a lot of moving variables inside. it's got the participation rate and the labor force and those people who are employed and those unemployed, and it's not an easy thing to do. i'm not sure the fed did itself a service here. also not clear to me how well they thought this through. i will tell you a lot of us fed watchers were very surprised the federal reserve did this, and the reason is because when you look last in the minutes it looked like they were pretty far apart, and all of a sudden it came together. i don't think the markets were
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really prepared for really understanding what this meant. you would have thought the fed chairman could have gone out there and gotten a speech explaining why this was good, how to work this and how to process this. the benefit is here all incoming information can be processed maybe a little bit more easier when it comes to unemployment on the fed and fed action. >> hey, rick, we're setting lows for the day right now in the equity markets is this about the fed and is it about the fiscal cliff? what's going on, do you think? >> well, i think in my opinion it's two-fold. i still contend that even though nobody is going to want to hear it that raising taxes on anybody is really just a bummer of an idea, a, and the fact that we pay so much attention to a dumb idea that makes so little difference in our real problem, but, b, i think that participants in equities are a bit nervous about the inflation. now, i think their worries are a bit premature but their worries are very legitimate. i think their timetable is still too short. >> even though gold is down today? >> yeah. you know, the problem with the gold trade is that we've really
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securitized gold. with all the gold etfs, are you really convinced that these etfs in some garage really have the amount of gold they have. in essence we've gone from trading gold as a commodity to a piece of paper. >> rick, this was your number one barometer for telling us we should be worried about inflation. >> no, gold hasn't -- gold hasn't been an economic indicator since i traded it in 1980. it's just -- you know what? it moves to a different drummer. >> wow. >> if you believe that, you know, we're going to be more like europe every year, i'd definitely be owning some gold. >> is that what you any? >> i don't -- i -- i have not liked gold as an inflation indicator throughout this whole run in part because i saw it as a flight to safety indicator more than anything else, not necessarily an inflation indicator. >> i agree. >> and it's hard for me to imagine that the equity market is trading for fear of inflation. every barometer i've looked at said this is a hawkish trade, a deflationary trade going on
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today, just the opposite. >> one more thing. i do agree that the reason i would never advocate selling stocks is because inflation is coming, and it's a great inflation adjustment instrument. >> all right. we'll leave it there. >> decoupling of gold and rick santelli works would have thunk it. >> thanks, guys. see you a little later. 40 minutes before the closing bell sounds for the day. market that is worse, down 100 points on the dow jones industrial average. as you can see, 96 points lower. >> someone just calling that, going back to the lows of the day. >> right. >> it's like a zombie, research in motion, the stock that just won't die. we'll find out if the buzz surrounding the new blackberry 10 can resurrect the stock? >> a little comeback going on. >> do you think things are bad in washington? at least we don't have fist fights breaking out in congress like this one in the ukraine parliament. >> not yet. >> while lawmakers in the u.s. are still far away from reaching the deal on the fiscal cliff,
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research in motion shares keep rallying. that stock more than doubling since hitting a nine-year low back in september when many thought the company might not survive. bertha coombs at the nasdaq market site with more on this. bertha? >> it's a real comeback kid, the comeback with the government that customs and immigration
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department is saying that they are going to try out the blackberry 10 after saying they would be the. all things reporting this afternoon, and part of the reason may be that the blackberry is actually going to pay the cost. nonetheless, this stock, the best performer in the nasdaq today, the best performer this month and even though it may not have as much market share momentum as the big rivals google and ale, take a look at the performance, at least since the start of december. back to you. >> has rimm moved too far too fast or is this the best to come for this shot? let's start talking numbers. chief market technician on oppenheimer and on the fundamentals herb greenberg, our senior stocks commentator. is there more to this than hopes for the blackberry 10? the stock is on fire lately. >> maria, it's buying on the rumor. ultimately selling on the news. so classic wall street with a heavily shorted stock, a stock
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believe don't believe, and people have been dying the stocks just like rim based on, you know, an announcement that they will roll the thing out. remember, there's a lot that has to be done once this thing comes out and prove it to the marketplace, but in my eyes it's classic. >> classic. carter, what's the chart say? >> sure. just as herb said, it's been moving aggressively, and it really isn't about the fundamentals. there are none. the fundamentals are terrible, but what we do know is the stock acts well, up today in a down day, up since september when the market's getting pounded and a classic garbage to gold, look at first solar, nokia, heretofore losers. probably isn't another issue after the 10 or 11. just that the stock has doubled and it's going higher. looks like it will touch 15 before this friendsy is over >> you think i should buy it right mere? >> i think you got 10% more. make some money. >> herb, what does this company need to prove the fundamental story intact? >> they need to effectively steal share from apple and steal
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share from the android products. >> not. >> that's going to be very, very difficult. you know, they are going -- they may stem the tide with this for people who don't want to leave blackberry, but they have got a lot to prove, and i have to say one thing. carter, you mentioned that garbage to gold, that says so much about the market, where we are today, and people sometimes have to look beyond, that so these are speculative plays the way i look at them, and, you know, the traders have a field day. >> sure. >> the tough part is for the investor. >> right. >> i'm just shocking with the whole not thing because the truth is i'm hearing a lot of good things about the blackberry 10 so maybe this is a game changer. >> it's just speculative. the key is do we make money or not? people are making money. people making a fortune. you've got to be long. >> maria, we're all hearing good things about it, but we also heard great things about the windows phone which many people say is just a fabulous product. remember, you've got two big guys out there right now, and the proof will be in blackberry. i'm not saying they can't do it
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because i can't see the future. i'm just saying the odds are against them. >> you were never a fan. >> pardon? >> you were never a fan. >> i was a fan for years when i used -- i used their products for many, many years. i was a late adopter to the android and a late adopter to other products, but once i got on the other products, i realized i didn't need anything else. >> would you switch back? >> why would i want to go something that's not part of my ecosystem. >> carter, real quick. on this chart what would turn you negative to say, you know what, this rally is done? >> gone from 6.50 to 14 or 15. the new 10, does it have a keyboard or not? >> does it have a keyboard? >> what else do they offer if they don't offer the keyboard? they take that away. oh, boy, anyway. >> they will have a keyboard at some point. >> good question. we're going to get tweets and e-mails about this, keyboard or no keyboard.
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we know that it's going to have the keyboard that you could bring up, like the iphone does. i don't know if it has an actual keyboard. >> old-fashioned -- >> we'll check it out. >> i bet we have the answer for you next break. thank you guys. appreciate it. hey, bill, does it have a keyboard? >> doesn't have a real keyboard, what am i going to do with my vintage blackberry? waiting six years to replace this thing. >> give me a break. >> i bought this six years ago. i'm waiting. >> what are you waiting for? >> i'm waiting for the blackberry 10, and if it doesn't have a regular keyboard, i'm sunk. i'm going back those old army phones that we slung around 15 years ago because i can't do a virtual keyboard. doesn't work for me. >> where were we? down 92 points on the dow so near the lows of the session, a and a key lawmaker is warning our economy may totally collapse, and it's not because of the fiscal cliff. he's here sounding alarm bells when we come back, and also ahead, what will happen to our economy if we do go over the
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welcome back. our next guest is warning that there's a fiscal cliff come, but it's not the one everybody is counting down into the new year. >> yeah. republican congressman paul brown of georgia is warning the country is heading toward a total economic collapse if we don't stop the runaway spending, and he feels that should be the focus in the current debate, not tax hikes which we've talked about on this program, as a matter of fact. congressman brown joins us now to make his case. total economic collapse. how much time do you give us here, congressman? >> i'll stay here as long as you want to talk. buy me supper if we stay longer than that. >> i mean, how long before you feel the kind of spending that we've been on for the last, you know, number of years, causes this total economic collapse that you're forecasting? >> well, bill, the country is broke already, and as soon as we cannot sell our government securities anymore, it's going to come. that's going to come sooner or later. barack obama's put us on a path that's going to make that happen sooner, but both parties are
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guilty of spending money we don't have. we eve got to make major cuts in the spending. it's not about taxes. it's about outrageous spending that's going to lead to a total collapse of our economy if we don't stop spending. we need to make the cuts. >> where's the most egregious spending? specifically what are you referring to? where's the most egregious spending? >> two examples, right now today in the department of education the average salary of the bureaucrats is $102 per bureaucrat. that's over twice what teachers all across the country makes. >> wow. >> another example is when this recession started there was one bureaucrat in the u.s. department of transportation that made over $170,000 a year. 18 months later, under this administration, there are 1,690 bureaucrats that make over $170,000 a year. we've got to stop that kind of spending, and both parties are guilty. >> hmm. >> you know how it works, sir. congress is in such a state of
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disfunction right now. they are like a group of firemen that waits to seat fire before they go out to do anything about it and right now they don't see that fire that you're talking about. right now the more immediate concern is this fiscal cliff short term that needs to be solved. is it going to be solved in a timely fashion? >> well, i don't know about that? we're going to see. the president is not coming to the table with any substantive types of suggestions, but we've got to stop spending. we've got to start focusing on spending and actually it's the american people that can focus on what we need to be doing up here in washington. the politicians are actually denying the problem that we have, and that's the outrageous spending going on up here in washington by both parties and we've got to start fixing that. >> would you include yourself in that the so-called politicians? >> no. >> let me ask you about this, congressman. what are you willing to give on? give our viewers who are very smart and informed about this subject, what are you hearing from john boehner? why haven't you guys done a deal
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yet? what's stopping you? >> john boehner is trying to get the president to come and make some kind of a good faith offer, and the president has totally refused to do so. john boehner is working very hard to try to solve this problem, but the president -- >> what is that good faith offer, the good faith offer includes spending cuts and increasing revenues but you won't touch tax rates? >> i'm not in favor on taxes going up on anybody. >> i'm not okay with that. would you okay the top 2% that the president is demanding in return for meaningful spending cuts in this fiscal cliff debate? woyou far? >> well, bill, we aren't seeing any meaningful spending cuts. the president has offered zero. >> if they could come up with meaningful spending cuts, would you be willing to offset that on the tax increase on the top 2% that the president is demanding. >> bill, let me tell you, if we
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tax the top 2% 100% of their income it would only fund the government for 91 days. that's not the solution. we've got to stop the spending, and we've got to make some wholesale cuts. i'm in favor of getting rid of the department of education totally. let's get rid of the e.p.a. and the department of energy and the department of commerce and a lot of these -- >> are you considering what the implications on education spending and education budgets will be? are you thinking about students? >> no, absolutely i'm thinking about students. >> really? >> let's find bridges to spend those powers back to the states and the people as the constitution calls it for it to be. let's leave the power in the hands of the states instead of sending up here and have bureaucrats that make $102,000 a year and most those have never tout a student how to read. that's not the solution. let's shrink the size of government and send those powers back to the people. that's the only way we'll prevent a collapse of this nation. >> with all due respect, sir,
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isn't the time for ideology past us now? we need to start talking -- >> 18 days. >> no, it's not time for getting past looking at the real problem. the real problem is outrageous spending that's going on here in washington. i don't know what kind of bills we're going to see. i don't know what kind of bills that we'll even have a possibility of considering on the floor. right now i think the president doesn't want any bill. i think he wants us to go off the cliff. >> let me ask you this. >> okay. >> if we don't have a deal by the end of next week, is it fair to say we go over the cliff because i know everybody is going away. >> they are leaving tomorrow. >> is it fair to say you don't have a deal by the end of next week we go over the cliff? >> maria, i'm willing to stay here until the 1st of january to find some solutions to actually stop the outrageous spending going on here in washington. >> you've said that. >> the markets want more
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clarity. why do you think it's in the president's best interest to go over the cliff? >> why would he want in a? >> why are people saying that, that the president wants to go over the cliff? >> i think he wants to try to destroy the republican party. i frankly think he wants to destroy the free enterprise system because that's all i see from this president. >> will it destroy the republican party if we go over the cliff? is it your fault? >> i don't know. we'll see. i think most of the policy that harry reid, nancy pelosi and barack obama are trying to promote are actually geared towards the 2014 elections. >> right. >> so that pelosi can be speaker again, and it's -- it's going to hurt the middle class. it's going to hurt poor people and senior citizens on limited incomes. >> congressman, just hearing that the graphic up that the president and speaker will be meeting again today at the white house to discuss the fiscal cliff so maybe there's a little ray of hope there. >> i hope so. the president has been nowhere to be found. he's been missing in action on this and has not offered any
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kind of real solutions to this problem. >> all right. maybe it will happen today. >> we'll watch the next meeting. thanks for being here on the program. thank you very much. >> congressman paul brown. coming up we'll hear from a lawmaker on the other side of the aisle who says raising the eligibility age is a non-starter in any deal to avoid the fiscal cliff. jan chakowski is here. i don't understand that either. taking the age from 65 to 67 gets you $1 billion. >> just today the democrats took it off the table. >> why? >> i don't know, and predictably we're coming off the lows right now with word that the president and speaker will be meeting face to face at the white house. the dow was down 90 point a moment ago, now down 57 point. keep an eye on this. >> let's find out how to make money. barclays out with its 2013 outlook. head of research is here. how the fed moves impacts your
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money next year and if it will impact his money, his 2013 outlook. >> later, if you could own one technology stock next year, which one would it be? noted technology investor dan niles is here, and you may be shocked and surprised to find out what name he's going with, still to come. you won't take my life.
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all right. the losses have been cut in half. dow was down 90-plus points a moment ago until we got word that speaker john boehner is headeded to the white house for a meeting face to face with the president on fiscal cliff issues. that meeting is scheduled to begin at 5:00 eastern time, and apparently they weren't supposed to announce it until 4:00 eastern time. >> somebody leaked it. >> somebody leaked it, and we got word and wall street going with it right now. >> so interesting to see one announcement of a meeting at 5:00 between boehner and the president and this market comes -- comes halfway back. i mean, that's how sensitive this market is. let's get right to eamon jafers. >> we're not getting any details
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of what is on the agenda for the 5:00 meeting. presumably they will pick up the tail of where they left off on tuesday with the duelling offers, exchange between the white house and the speaker's office. now we'll have to see if somebody is willing to put new specifics on the table and if we can pry that out of the speaker's office or the white house after the meeting. very, very tight-lipped about what's going on behind the scenes. this is an indication in some progress behind the scenes, maria. >> that's good, that's good, because we're getting close. 18 days away. barclays, meanwhile, recommending a shift in positioning from safe assets into riskier investments next quarter. but since fed chairman bernanke's bond buying announcement yesterday, will they change their minds? >> have you changed your mind? >> how -- how do you possibly come up with a forecast for next year with all that's going on in
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washington right now that can have such a profound impact, right? >> we're assuming they won't allow this thing to happen throughout 2013. that's how you get $650 billion, if they do nothing for the whole year. they may go through december 31st, but it's very unlikely that they don't make some agreement to prevent this massive fiscal tyingning and the economy going back in recession by something like mid-january, so to us, if you did go down, if you go through december 31st, the market has a significant direction, that's a good buying opportunity. on the other hand, i think that's why the market hasn't moved very much. >> you want to say risk on. >> you're moving from safe assets into risk i investments. >> that's been the trend. why? because the central banks have driven returns on the safe assets to nothing practically, and if there's inflation it will be negative, and you're seeing investors move out. now, think about this, in the last 3.5 years we'd all agree
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the economic outlook has been lousy. why is that? massive monetary expansion involving asset purchase. yesterday's announcement by the fed, they are stepping it up. 45 billion and before they were selling short-term assets. >> how long can that last, larry? can it only be the fed in the game? don't we need more fiscal policy? >> the ecb we think will get in the act next quarter. >> they are already in the act. >> and they will stop it up. the boj will step it up. >> it your bullish call for the market next year based on monetary policy or the fundamentals of the economy. >> monetary policy. continued monetary expansion. >> you know, you make a great point. monetary expansion is not a great reason. it's not a firm foundation for stock prices going up, and at some point we could be in big trouble with this. what i would say it's too early to fight it because, first of all, not only is the fed not pulling away from this, they are stepping it up. >> yeah. >> and other central banks are going to step it up.
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we counted something like 11 trillion expansion in central bank balance sheets since this started. >> any risks to this? any downsize risks of the huge expansion of the balance sheet? >> it's obvious. >> when you think about it, monetary policy is a growth strategy. fiscal policy is more austerity. talking about raising taxes and cutting spending. doesn't that work at odds with what the fed is doing? >> you could do an energy policy. that's fiscal policy and create jobs. there are other things. >> the fed feels they are the only game in town, partly because fiscal policy's got to go the other way, and they are trying to keep the economy going with this expansion. is it a risky strategy? absolutely. >> yeah. >> and they don't want to say that they are nervous about it, but this is an experiment. they have never done this before. >> what do you want, buy technology? >> you know what? i think what you're seeing is bett performance going out the risk curve, okay? so early on you could make money buying treasuries because they rally. now we think they can't rally
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anymore. people moved into investment grade credit, right, safe assets. those yields are so far down so they are looking at riskier part of the curve. some of the high yields, we're being very picky. also remember systemic risk is going doubt. the possibility of your area falling apart with the ecb in the game right now. china, hard landing, so you've got worries about that so that's less downside. >> the dividend payers everybody was rushing, to you're going even beyond that to riskier assets in the stock market. >> going into cyclicals, some of which have been beaten down. these are the kinds of things. i think, now, the fiscal cliff saanich u, no question about it. we are going to get fiscal tightening one way or the other. what we're assuming is this is such a lose-lose proposition for both sides. if they actually let this thing, not gust get through december 31st and do nothing about it. think about it. can president obama get anything done until he gets something, no? >> all the cuts that happened as a result of the fiscal cliff, all over the place. let's cut hundreds of billions
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in defense. it doesn't indicate what missions are going to be no longer what, programs we're going to kim. i mean, we really have to be stupid to be doing that. >> so irresponsible. >> not knowing where the cuts are hitting. >> right. >> for the security of this country. >> i agree. >> so, therefore, you're going to get some agreement. maybe it's january 5th, maybe it's december 30th, january 10th, but it will probably be a band-aid agreement. that's the problem. this isn't going to be one of these long-term deficit reduction, credible agreements that does tax reform, entitlement reform. >> that's for another day. >> that's for another day, so i don't think the markets are going to real that much, but i think it will prevent the fiscal cliff. >> always good to see you, larry. >> very good insights for next year. >> ten minutes before the closing pebble. a market that's low but well off the lows of the day. real comeback on the hools of the announcement that the
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president and speaker boehner will meet. what leaders did agree on before leaving down for the long weekend. i think you'll like this one. >> and then john mcafee's bizarre run from the law in belize has taken him back home to the united states, and now the anti-virus software firm that bears his name is warning a major cyber threat is also headed to our shores. details on both of these stories later on the "closing bell." andr made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors.
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. okay. once again evidence that wall street is fixated on washington. we were down 90 points when we came on the air at 3:00 eastern time on the "closing bell." now we're down 50. because? >> president obama and representative boehner have announced and boehner's office confirmed they will meet at the white house today at 5:00 p.m. eastern right after -- right after the closing bell, bill. >> right after. >> the point is the house has said they are going away for a long weekend tomorrow, and here we have boehner -- >> wait, don't go yet. >> getting this meeting in at 5:00 p.m., and it's amazing the market came halfway back just on that announcement. not that we have details of a deal, not that we know that we're having an agreement. just the fact that they are meeting. >> actually i thought they would come off the loews much more. >> you did. >> cut it in half, but it
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stalled here. >> we need more detail. it is encouraging. >> yeah. >> that they are talking. i mean, as long as you've got them in the same room. now, you know, john boehner has said he's leaving tomorrow, come hell or high water. he's going back home to get red for christmas. he says, you know, there is a telephone. >> not leaving for a long weekend. >> you can negotiate over the telephone? >> can't do it. >> no credibility. can't do it. >> i'm guessing. >> you have to be in washington. >> you know what? i've been hearing some of the analysts say that is a powerful impetus to get a deal done. they don't want to be here for christmas eve, right? >> would the president negotiate from hawaii? he's supposed to go to hawaii on december 17th. >> they have telephones in hawaii, i can tell you. >> no credibility. you have to be in washington. america will not stand for that, for these guys being on vacation. >> nancy pelosi said the deadline is early next week. >> if we don't have a deal by
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the end of next week, no deal to go over the cliff. >> let's do the countdown. down about 54 points. >> meanwhile, michigan is becoming the 24th right-to-work state here in the country. someone here says unions are toxic for both workers and companies. we'll tell you all about it. stay with us. sfx- "sounds of african drum and flute" look who's back. again? it's embarrassing it's embarrassing! we can see you carl. we can totally see you. come on you're better than this...all that prowling around. yeah, you're the king of the jungle. have you thought about going vegan carl?
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welcome back. two and a half hours left before the bell rings. once again, this is the chart that shows what happened today. i mean, it's like we dropped breadcrumbs as we went along the path today. this is when harry reid and john boehner were all saying doesn't look good, doesn't look good. neither side is coming together with talks at all. we were down 94 points at that time. now we've come back because word comes that john boehner is headed to the white house to meet with the president at 5:00 eastern time. now, through all of this, and we've pointed this out before, the fear indicator, the volatility indicator at the cb o'has yet to real signal a yellow flag, any kind of warning sign. you get there when you get to 20. we haven't been to 20 since july. also, very interesting.
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the research team at cnbc put together these two fiscal cliff portfolios, one risk on that should do well if we don't go over the cliff. one risk off that should do well if we do go over the fiscal cliff, and just on monday the avoid the cliff portfolio started to go positive since election day, signaling that the market was maybe betting that we will get a deal sometime soon. warren myers of dme securities. what do you make of this right now? >> i think it's interesting. the fiscal cliff comments appear to be the new greek rumor comments. every time something comes out, much like rumors out of greece. >> you guys hopeful on the floor that we get a deal sometime soon? >> you may not get a finalized deal but you'll get something done before the year end which will give us confidence to keep the market stabilized. >> members of the house tomorrow go home tomorrow for christmas. can you get a deal if they are home? >> i think you can. i think it's a little more di